8. Questions and Problems 16People often argue that large firms in an industry have cost advantages over small firms in the same industry. For example, they might assert that abig oil company must have a cost advantage over a small oil company.For this to be true, what condition must exist?O There are no economies of scale.There is no necessary condition for large firms to have a cost advantage over small firms.There are economies of scale, and the small firm is operating at an output level at which economies of scale exist.O There are economies of scale, and the large firm is operating at an output level at which economies of scale exist.

Economies of scale refer to state production where firms' costs start to fall as more and more goods…

People often argue that large firms in an industry have cost advantages over small firms in the same industry. For example, they might assert that a big oil company must have a cost advantage over a small oil company. For this to be true, what condition must exist? O There are no economies of scale. O There is no necessary condition for large firms to have a cost advantage over small firms. O There are economies of scale, and the small firm is operating at an output level at which economies of scale exist. O There are economies of scale, and the large firm is operating at an output level at which economies of scale exist.

People often argue that large firms in an industry have cost advantages over small firms in the same industry. For example, they might assert that a big oil company must have a cost advantage over a small oil company. For this to be true, what condition must exist? O There are no economies of scale. O There is no necessary condition for large firms to have a cost advantage over small firms. O There are economies of scale, and the small firm is operating at an output level at which economies of scale exist. O There are economies of scale, and the large firm is operating at an output level at which economies of scale exist.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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For a firm with a Total Cost function TC C(Q), recall that the definitions of Marginal Cost (MC) and AverageTotal Cost (ATC) are given as follows:Marginal Cost (MC) = C'(0)Average Total Cost (ATC) = C(Q)/QProve that the marginal cost is equal to the average total cost (MC = ATC) when the average total cost is at itsminimum value.(Hint: By using the definition of average cost function, find the quantity that minimizes it by applying unconstraint optimization.Show that the FOC of the minimization problem implies that MC=ATC has to be satisfied at the minimum level of average cost.)
ASAP
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